Banks increase interest rates on deposits

By Dat Nguyen   October 5, 2022 | 09:08 pm PT
Banks increase interest rates on deposits
Cash is handed over at a bank in Hanoi. Photo by VnExpress/Giang Huy
Banks have hiked deposit interest rates by up to 1.9 percentage points to nearly pre-Covid levels.

More than 30 lenders raised them last month, 20 of them across the board.

The average increase was 0.9 points for three-month deposits and 0.35 points for six months or more.

Only four have not tinkered with the rates: Techcombank, ABBank, Oceanbank, and CBBank.

For six- and 12-month deposits banks are now paying 7-7.9%. For three months many pay 5%.

Some like SeABank and VietCapital Bank have sold certificates of deposit with interest rates of around 8.5%, but they are less liquid than a normal savings account.

Analysts with SSI Securities Corporation say deposit interest rates could continue to rise as the difference between mobilizing capital and providing credit has not improved much.

The State Bank of Vietnam (SBV) last week used open market operations to pump VND28.1 trillion ($1.18 billion) into the market and sold foreign currencies worth VND35 trillion.

Tight liquidity has caused interest rates on loans to increase sharply. On Tuesday, the overnight interest rate surged to 8-9% per year. It was around 7.5% per year for other terms.

The SSI analysts expect the central bank to maintain just enough liquidity in the banking system for the rest of the year in order to maintain the VND interbank interest rate in the 5.0 – 5.5% range to create a reasonable spread with the USD interest rate and minimize pressure on the exchange rate.

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